Correlation Between SPORT LISBOA and ELECTRONIC ARTS
Can any of the company-specific risk be diversified away by investing in both SPORT LISBOA and ELECTRONIC ARTS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SPORT LISBOA and ELECTRONIC ARTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORT LISBOA E and ELECTRONIC ARTS, you can compare the effects of market volatilities on SPORT LISBOA and ELECTRONIC ARTS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SPORT LISBOA with a short position of ELECTRONIC ARTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORT LISBOA and ELECTRONIC ARTS.
Diversification Opportunities for SPORT LISBOA and ELECTRONIC ARTS
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPORT and ELECTRONIC is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding SPORT LISBOA E and ELECTRONIC ARTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELECTRONIC ARTS and SPORT LISBOA is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SPORT LISBOA E are associated (or correlated) with ELECTRONIC ARTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELECTRONIC ARTS has no effect on the direction of SPORT LISBOA i.e., SPORT LISBOA and ELECTRONIC ARTS go up and down completely randomly.
Pair Corralation between SPORT LISBOA and ELECTRONIC ARTS
Assuming the 90 days horizon SPORT LISBOA E is expected to generate 1.08 times more return on investment than ELECTRONIC ARTS. However, SPORT LISBOA is 1.08 times more volatile than ELECTRONIC ARTS. It trades about -0.16 of its potential returns per unit of risk. ELECTRONIC ARTS is currently generating about -0.35 per unit of risk. If you would invest 335.00 in SPORT LISBOA E on September 27, 2024 and sell it today you would lose (16.00) from holding SPORT LISBOA E or give up 4.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPORT LISBOA E vs. ELECTRONIC ARTS
Performance |
| Timeline |
| SPORT LISBOA E |
| ELECTRONIC ARTS |
SPORT LISBOA and ELECTRONIC ARTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORT LISBOA and ELECTRONIC ARTS
The main advantage of trading using opposite SPORT LISBOA and ELECTRONIC ARTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORT LISBOA position performs unexpectedly, ELECTRONIC ARTS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ELECTRONIC ARTS will offset losses from the drop in ELECTRONIC ARTS's long position.| SPORT LISBOA vs. The Walt Disney | SPORT LISBOA vs. Charter Communications | SPORT LISBOA vs. Warner Music Group | SPORT LISBOA vs. ViacomCBS |
| ELECTRONIC ARTS vs. SPORT LISBOA E | ELECTRONIC ARTS vs. DICKS Sporting Goods | ELECTRONIC ARTS vs. Molson Coors Beverage | ELECTRONIC ARTS vs. United Breweries Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the CEOs Directory module to screen CEOs from public companies around the world.
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